Buying precious metals carries along with it many benefits. For example, they help to diversify your portfolio, work as a hedge against inflation, and give proper protection of purchasing power and more. And even though we believe investing in hard, physical assets such as gold and silver is truly one of the best investments you can make, there are still several vital issues to consider when growing a substantial holding of precious metals. Listed below are most of the common mistakes made by beginners when purchasing precious metals and how you can avoid making them.
1. Not monitoring the selling prices of precious metals enough: You should know when prices rise and when they fall. A lot of people make the mistake of buying when selling prices are quite high; either because they notice them rising and buy instantly or they don’t take account of the oscillations in at all.
2, Attempting to time the current market: There are a number of reasons why you should think about adding gold or silver to your portfolio. While price appreciation is certainly one reason, it is certainly not the only reason. Trying to time the market and buy gold and silver at a much better price may certainly sound good in theory, but that’s what it is basically– simply theory. Not many people can time the market successfully and besides, you are purchasing gold or silver for their lasting potential benefits. Forget about buying low and selling high. Simply buy, and keep buying.
3. Not doing some research to compare prices and buying very high-priced products: Not every investment precious metal product enjoy the same price. Having said that, a number of sellers sell them at a big price. The higher the price, the more you will pay in vain. It’s like tossing your hard earned money out the window. Take some time look at the spot prices of precious metals, and compare first the prices of products sold by different companies. Ultimately you will find the suitable seller that gives the smallest percentage on top of its products.
4, Having unrealistic expectations: Though the value of gold, silver, as well as other precious metals might appreciate substantially – and occasionally rise quickly – it is very important to view the forest through the trees. Any price appreciation in these metals should be considered an additional bonus. Your major focus when it comes to buying gold or silver ought to be on their potential benefits as a hedge against several economic and geopolitical issues such as currency depreciation, inflation, or even deflation. Even though there is absolutely no reason to say these metals won’t rise substantially in cost, they should not be purchased purely for rapid price appreciation.
5, Purchasing scrap gold, scrap silver: Do not simply buy anything that’s made from precious metals. A necklace, a ring or an old coin would certainly give you lots of headaches when trying to re-sell it in hard times. Scrap precious metal items are not investment metals! Only a few people would want to purchase them from you, as many of these are not pure.